Tag Archives: personal finance

5 awesome books about money – for women, by women

5 must read books about money for women

I’ve been on a bit of a roll lately devouring books about money and career as I get closer to exiting the 20-something age bracket and ponder what my 30s could be like.

In particular, I’ve been focusing on personal finance/career books by women. Here are some of the best I’ve read:

Secrets of Six-Figure Women: Surprising Strategies to Up Your Earnings and Change Your Life by Barbara Stanny

Things Barbara Stanny and I have in common: We were female writers who didn’t earn huge amounts. Things we don’t have in common: Rich families, trust funds.

That aside, this is not a book about Stanny, it’s about the many high-earning women she interviewed and the insights she has distilled into 11 chapters in Secrets of Six-Figure Women. Even though she began writing it before the GFC, her foreword notes that these women either survived the recession well, or were able to rebuild despite knockbacks. And as we find out, resilience is a key trait among high earners, among others. They aren’t groundbreaking secrets, but they are important reminders, and I suspect this is the kind of book you could come back to over the years for a fresh dose of motivation.

Read it if you: Struggle with underearning (want to earn more, and are capable of earning more) and having belief in yourself.

Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin by Valerie Rinds

I had a bit of a wakeup call in 2015 when I realised I was putting other people’s happiness ahead of my own, and making myself miserable. It was also severely damaging my own financial situation. I really needed to read this book back then – if only I had known about it!

Gold Diggers and Deadbeat Dads mixes Rinds’ own story of financial hardship with other true tales of people who faced financial ruin thanks to the wrongdoing of other people. It’s entertaining, engaging and educational. And it’s a cautionary tale – choose your partners wisely, because they can make or break you financially. Rinds plays it straight – there’s no judgement here, just real stories told by real people.

I think there’s often a fine line between victim blaming and accepting responsibility for your own choices; it’s definitely one I have struggled with myself. If you have caretaking and enabling tendencies, you may very well find loved ones taking advantage of you financially. It may not seem like it at first, it may not feel like it, and it’s an ugly, painful thing to wake up to.

Read it if you: Struggle with financially supporting other people in your life and have trouble saying no.

The Art of Money: A Life-Changing Guide to Financial Happiness by Bari Tessler

Caveat: The Art of Money is a little hippy dippy, particularly to start off with. It’s not everyone’s cup of tea, but if it doesn’t put you off, then you might just find this a refreshing read.

What spoke to me was the heavy emphasis on the emotional aspects of money. The first half is devoted to untangling your relationship with money, and the second tackles more practical aspects of money management, interwoven with the values and emotions that are all tied up in what we bring to the table when it comes to personal finance.

I came to this book with a certain amount of regret and baggage that’s been weighing me down, and somehow I felt lighter for having made my way through it. Tessler’s incredibly compassionate approach and frameworks are the polar opposite of tough love – more like a warm bath or sustained hug. Sometimes, that’s just what you need.

Read this if you: Struggle with bad money juju that you need to get past and let go of

When She Makes More: 10 Rules for Breadwinning Women by Farnoosh Torabi

It sucks that books like this exist, but IMO they are a necessary addition to the landscape. I will say right now that I didn’t find any new practical strategies in here, but it was at times thought provoking and most importantly, it brought voices to the forefront that are otherwise stifled.

In an ideal world, it WOULDN’T matter who earned how much. But we live in the real world, with flawed workplaces and human relationships. How we feel about these things matters, just as much as how we deal with them.

And that’s where I got the most value out of this book: reading stories of other women struggling with inequality, resentment, and navigating complicated dynamics. The emotional turmoil, I would argue, is the hardest to reckon with, and this book is a reminder that you are not alone.

Read it if you: Struggle with being the breadwinner (there’s no shame in that)


What Works for Women at Work: Four Patterns Working Women Need to Know by Joan C Williams & Rachel Dempsey

I am not in law (or finance, or consulting, or any of those types of industries) and this book is definitely more targeted toward women in similar fields. I also count myself fortunate to not really have personally encountered sexism in the workplace so far. However, I know it exists and I have seen others run into it. And as I progress in my career and start thinking about how having a family might mesh with that, I found it interesting to read about the extra tightropes that working mothers walk. After all, career progression underpins finances, for most of us.

What Works For Women At Work identifies the four main issues women encounter in the workplace – Prove It Again, the Tightrope, the Maternal Wall and the Tug of War – backed by research. It’s non judgemental and tries to take a big picture view as much as possible: it’s not just you, the system is actually broken. The advice on actually dealing with those biases is a little light, but as we all know, there are no quick and easy fixes in this area. We can do as much as we can as individuals, but real change and real solutions go beyond that.

Read this if you: Struggle with progressing in the workforce and wonder why you aren’t getting ahead

I like big bucks and I cannot lie

Money stress? No thanks

“Money is the biggest stressor in Kiwis’ lives, and it is the young that are feeling it most.” – Stuff

Man, do I know that feeling. Money was the number one source of stress in my life for the majority of 2014 and 2015, and it was THE WORST.

We spend most of our lives working for money, and you can’t get by in the world without it. My life has only improved as my income has risen. It is not the #1 factor in my career decisions, but it is a significant factor.

I’m no longer ashamed to proclaim that I like, nay, LOVE, money. Like Bianca Bass, I’m taking a stand and putting it out there. She sums it up wonderfully in these three sentences.

“Money is wonderful. It’s the difference between having choices and having none. It’s the difference between worrying about bills and having the mental space to think about more creative things.” – Bianca Bass

Being broke is a time suck, and an energy suck. Things like navigating public transport in many cities, bargain shopping and researching every single purchase to save every possible cent takes up a huge amount of your time.

They say wealth is the ability to fully experience life. Hell, even a modest existence requires money – and in New Zealand, quite a bit of money, actually.

It’s not very PC to say that you like money and want more of it. People like to argue that money doesn’t solve all problems, that having too much money is just as big of a problem, etc… Which I just find so hilariously out of touch with most people’s realities. More of us than not are worrying about how to make ends meet, how to support a family, how to afford a comfortable retirement. Your average person is never going to have #richpeopleproblems – myself included.

“I think about how much money I’m making and how I could find more of it, not out of greed but out of a pressing need to know that regardless of what happens, I will always be able to take care of myself. I love money for the security it represents. Worrying about money has been a defining characteristic of mine for as long as I can remember.” – Megan Reynolds

Preach it… To me, money means options. It means peace of mind. I spent a solid chunk of time feeling panicked about money on a day-to-day basis. Downgrading that to mild worry has been awesome. I want to accumulate money, not for the sake of it, but for the security and freedom (ha yes, two slightly contradictory words) it brings.

brokeGIRLrich

Why millennials need to save for retirement

Why millennials need to save for retirementIt’s safe to say I never really gave retirement very much thought at all until this year.

But now that I’m not deathly worried about bouncing from cold damp rental to cold damp rental for the rest of my life, I can focus on other things.

Also, some of the things work has sucked me into lately are all about retirement savings and planning for the future. Heavy shit, in other words.

All around the world countries are struggling with the affordability of supporting retirees.

In the future we probably won’t be able to rely on superannuation, and will probably have to pay more of our own living costs and health costs.

Currently NZ has low levels of elder poverty – our  high levels of home ownership, and NZ Super being universal, non-means-tested, and pegged to 66% of the average wage play a role in that. But soaring house prices mean home ownership levels are falling, and I can’t imagine NZ Super will be immune to the kinds of pension reforms that are underway around the world.

Seeing and hearing some of the things people say on this subject makes me shake my head.

I can understand indifference and inertia. I know it feels hopeless. You need to save so much for retirement and it seems like your money isn’t going very far. Hell, I know *I* should really be saving more. But something is better than nothing.

What I don’t understand is all the ignorance and paranoia out there around KiwiSaver. Seriously. 1) Take the free money, the rest of us are! 2) Your KiwiSaver funds belong to you, not the government. Let go of those tinfoil hats, people.

Save for the futures, dudes. It’s one thing to pay for the less fortunate – the non-able, whose who don’t earn a living wage – those who aren’t able to take care of themselves. It’s another (and kinda immoral IMO) thing to be a drain on the system because you simply didn’t plan ahead.

As soon as you can, get started. Even if you start small, you can always ramp it up. Every little bit helps. Time, at least, is on our side. Just do it.

When She Makes More: 3 outtakes from this breadwinner

What happens when she earns more money

I put off reading When She Makes More by Farnoosh Torabi until now, because of the criticism I’d heard about this book: patronising, sexist, heavy-handed on the stereotypes.

There’s some truth to those points, but you know what? I loved this book. LOVED it. I felt so much less alone reading When She Makes More and honestly, I wish I’d read it earlier when I was really in a bad place. I just devoured all of the stories of the couples she interviewed. It was incredibly validating, and that for me was the real value in When She Makes More – just knowing that others out there totally got it, went through similar experiences, and recognise that it IS hard.

While I didn’t come away with any groundbreaking insights or practical tips, I appreciated what I got out of When She Makes More. Based off the pages I nodded at/bookmarked the most, here are the key points that most resonated with me.

 

Who we are

Of course there are thriving couples out there with female breadwinners, and that’s not really who this book is for. It’s more likely for those of us who fall into the category defined by the divorce lawyer Torabi quotes in one of the chapters: the husband who sort of has a job but isn’t trying very hard to generate more income, or is self-employed but not really working.

Why it’s different for women

The stress we feel as primary income generators is just not the same.

We live longer. Any financial decisions need to factor this in – how might they affect the stability of your future if you outlive him?

It’d be remiss not to mention the gender pay gap in here, too. Our earnings underpin everything. Yet on average we tend to earn lower incomes than our male equivalents.

If you’re not planning on kids, this isn’t so applicable – but the question of starting a family is where it really starts to get complicated.

If the household is dependent on your income, then there isn’t even a hypothetical choice about whether to scale back or stop work. Plus, that’s assuming everything goes smoothly. What if you have health complications during pregnancy or after birth – or the baby does? And what if you want to take a longer maternity leave than normal? What if your mindset totally shifts after birth and you decide you want to be primary caregiver? There are so many unknowns.

Obviously, the ideal would be if both partners earned an income that was individually sufficient to support the household. If that’s not the case then there may need to be some serious conversations and forward planning – whether that means working toward a plan where he can bring in more income, or something else that works for the couple.

In many of the couples cited, the woman had a seriously high powered, high paying C-suite job, and presumably this was less of a concern than in couples where the woman earned more but not necessarily a huge salary. At a high enough income you’d at least be able to bank a lot to hedge against those hypotheticals.

Torabi writes that female breadwinners with a dependent family are living in a high stakes world – it’s vital to remain sought after in your work, to learn to navigate the biases and double standards at play, and build the reputation and professional capital that will serve you well later on.

Another point that probably belongs in here: the so-called second shift. Even when the woman makes more, even if the man doesn’t work, she almost always puts in a significant amount of housework/childcare. Even when the financial roles are reversed, the roles at home do not typically fully reverse.

The risks

Resentment, resentment, resentment. Particularly when paired with the point above re: equality of housework. Resentment is the most dangerous feeling of all, particularly when it leads to wondering if you’re better off without him. (And maybe in some cases you are. It wasn’t until I actually left that he bucked up and started to get his act together.)

“The longer the woman has to support her lackadaisical husband, the quicker her feelings of frustration move into the bitter zone, after which the resentment takes over,” Torabi writes. It’s common for breadwinning mothers especially to feel at least some resentment, guilt and anger.

Female breadwinners are more likely to be unhappy, feel pressured to work less and even get divorced, she says. There’s the pressure to keep your job, the worry of having everything depend on you, and the desire to have an equal relationship with your partner.

Let’s face it, this permeates every facet of a relationship. When we talk about money, Torabi points out, we’re actually talking about our entire lives. Money affects how each of you feels about one another and about your relationship – and it also directly influences the frequency of and satisfaction with your sex life. (Can confirm. Broke sex is bad sex.)

If the guy has made financial mistakes in the past and is yet to prove he can be financially responsible, it can be difficult to trust him. Often it leads to mothering and controlling in an effort to remedy that, which sucks for both parties. I never liked being the mean/boring one saying no – we can’t afford that – or assuming responsibility for handling all the finances, or feeling unable to rely on anyone but myself. When a partnership turns more into something resembling parenting, it’s a bad sign.

Often couples that struggle the most are those whose incomes were fairly equal until he lost his job. But whatever the cause, what matters is how we cope in response. And figuring that out takes time. Financial and emotional equanimity are moving targets in any relationship, Torabi says, and this is so true in my experience. Ultimately, it’s a process.  




One last point I liked in the book and would love to see play out: the suggestion for a shift in the campaign for paid parental leave that puts the focus on the benefits for families. How could anyone be against working families?

But ultimately, the biggest strength of When She Makes More is that it’s not too concerned with how things should be; it’s about how they are in reality, and how to cope with that. Yes, things should be perfectly equal at work and at home. It shouldn’t matter who makes more, practically or emotionally speaking. BUT. We live in an imperfect world and we as humans are flawed – we just have to work within these constraints the best we can.


brokeGIRLrich

My love/hate relationship with my mortgage

My love hate relationship with my mortgage

I’ve always felt … oddly grateful toward my mortgage.

I feel much better about making mortgage payments every two weeks than I ever did about paying rent. My mortgage is a means to an end:  better health, quality of lifestability (and peace of mind). And one day it will be gone, gone, GONE.

But it does weigh on me sometimes.

I recently got my 6-monthly mortgage statement.  Since buying my house in March I’ve paid off $6574 of principal. Sweet! But nearly half of that was extra repayments, which I made straight to principal. Eeesh.

Much as I want to throw everything at it, though, there are other things I want to do in life. Like modernise my 1960s kitchen, for starters, and invest regularly (outside of KiwiSaver, that is).

I’ve always been terrible with balance, and balancing my mortgage against other financial priorities is probably going to be an ongoing struggle.

Homeowners, how do you feel about your mortgage?




How homeownership saves me money

The surprising ways home ownership saves me money

Over the past decade I’ve wasted thousands of dollars renting (not even counting rent payments – those would be in the tens of thousands and at least I got shelter in exchange for those).

There are costs that come with home ownership – some unavoidable, some totally up to you – but those are covered extensively elsewhere on the internet and I’m not getting into those today.

No, what I’m talking about are the surprising ways home ownership has saved me money here and there.

Power

A poorly insulated house is less efficient to heat. We’ve lived in iceboxes half the size of this house that cost the same in power bills as this one. And in the case where we’ve lived with flatmates, well, other people often don’t care about saving power the way you do.

Related: I’m probably saving a small fortune on tissues. I no longer have a constantly blocked or runny nose – it’s the exception rather than the norm now.  Rental standards in NZ are pathetic (and here’s even more skin-crawling stuff).

Now don’t get me wrong. This is still an older house and we’ll need to add more insulation to the roof, which will be in the realm of $1500-2000 if we DIY and more if we get in the pros to install it. On the very coldest nights this winter the roof has gotten down to single digit temperatures overnight, with the rest of the house plunging to low double digits, which isn’t ideal. But it’s noticeably drier and warmer than the many rentals I’ve endured.

I’m sure winters are getting colder (either that or I just feel it more with age) and T agrees. We experienced some record low temperatures this year and last, so I don’t think it’s entirely my imagination.

Insurance

My content insurance dropped to a third of its former cost once I became a homeowner. I’m deadly serious. Car insurance also decreased by a tiny bit. Just another way renters get ripped off.

Going out

Home is a haven now. Not a cramped, damp place to escape. Not a place with flatmates who grate on your nerves. I love my house so much, warts and all. I’ve always been a homebody and at last, after so many years, I have somewhere I can honestly nest and settle in for real. I feel an unbridled sense of joy and serenity every time I  step out onto my  sunny deck or sit down in my dining nook.

As you can probably guess, I have had zero regrets about buying a house. Home ownership has been everything I dreamed of and more.

brokeGIRLrich

PSA: Check your credit!

Credit check
Credit check
It’s that time again: time to check up on my credit report!

As a commenter wisely pointed out, my recent drama with collections (over $50, of all things) means I should definitely check and make sure that it has been fully withdrawn and isn’t on my credit record. If it is, I’m seriously going to go ballistic.

If you’re not sure how to check your credit report in NZ, here’s how. There are 3 reporting agencies. Below are the current links to request your free credit record:

You can do it all online – just enter your details and request a copy to be emailed or posted to you. They ask for your name/s, address history, and employment info. You will need the details of your ID (eg driver’s licence info) and may need to upload a scanned copy as well.

NZ credit reports include your personal details, a list of credit enquiries, any default, judgement or insolvency details, and repayment history. The repayment history isn’t exhaustive – not all credit is reported. For example, my 2015 report included my credit card history but did not include my car loan history at all.

Although I was able to obtain my credit score for free back in 2010 when they were first introduced, it seems you can no longer see your credit score unless you pay for it. Not like in the US – where you can easily get your free credit scores in a jiffy.  I have no idea what mine is now!

When sanity > principles

Money or sanity?

I have a strong sense of fairness and justice (which sometimes makes it hard to exist in this world). But I’m also quite pragmatic and getting more ruthlessly so over time.

Which is why I’ve made the conscious choice to write off certain sums of money over the past few years. To move on and look forward. Let go of the expended stress and energy, and devote that time and headspace into productively making that money back even quicker. And of course, to not get into the same situation again.

Let it goooo

Heinous flatmate (approx $1000)

Blood from a stone. He was a terrible person to live with and is terrible with money/being employed/adulting in general. I’ve written off the money he owes for bills and damage and moved on.

Tax refund

Can’t really remember the amount – maybe $500? Anyway, T was due a tax refund a few years back that went into limbo somewhere between the IRD and his bank account. Endless back and forth never resolved it and we’ve moved on. (Subsequent refunds have made it through fine.)

Work expenses

Again, the exact amount has faded from memory and I’m certainly not going to check and dredge it up, but a couple hundy? Suffice to say toxic boss #2 in this post was a nightmare from start to finish. T chatted to someone from the labour department but ultimately, not enough proof of the context and it being a work expense. Live and learn.

Unpaid freelance invoices (approx $1000)

Loved the work. Hated the chasing of payment. I did a series of features and was paid for about half. Struggling magazine, new editors, tardy accounts … just one big clusterfuck.

Unrefunded bond (approx $700)

Our last tenancy was a nightmare. Anything to put that memory behind me.

I know lots of you mentioned in the comments on this post that you’d written off small amounts in the past – what about bigger ones?

Disease Called Debt

CYA: Revisiting my insurance coverage

Although insurance isn’t a huge line in my budget, the peace of mind it provides is invaluable. While my car insurance is pretty sussed and doesn’t require much thought, a couple things have got me rethinking some of my other insurance cover.

Contents insurance

I stumbled across a TradeMe thread the other week in which people were discussing how much contents insurance they had. $100k for a three bedroom house seemed to be the consensus. This was my reaction:

WTF?And then I followed one of the links through to a contents insurance calculator and whizzed through quickly. By our standards, their allowances were a teeny bit insane. $7k for two laptops? A $1500 dryer? $4000 of shoes per person? An expensive china cabinet full of antiques? Nuh uh.

I’m not sure we count as minimalist, but we don’t have a ton of stuff realistically and most of it isn’t worth very much.

To be fair, we probably are a little underinsured (I can’t even remember exactly how much cover we currently have) but hopefully come next renewal, we’ll also have redone the kitchen and may as well roll all those changes up at once. Very little we own was obtained new, but I am definitely aware that should we need to replace it all at once it would be expensive. That said, should we lose everything in one fell swoop, we would still replace things gradually in order to get more for the money. It took about 3 months for us to buy a bedroom set after moving in here (dresser and bedside tables).

A kitchen with a dishwasher, a decent fridge, a gas stove and cabinets not from the 1960s will probably add a significant number to the amount we want to be insured for. Still, the annual premium dropped to around $400 when I became a homeowner, so hopefully it will still be pretty affordable even after increasing the coverage and updating the policy accordingly.

Health insurance

Previously I’ve had a bit of a look into private health insurance – where previous employers offered discounts through Southern Cross (my current one does not) and when I needed my wisdom teeth out. And maybe now once again, since a friend is undergoing expensive dental work after an accident which is only partly covered by ACC.

Every time I’ve reached the conclusion that for me it’s a waste of money, my needs are around optical and dental and the cost of policies just don’t stack up against what I would get back. T might benefit from policies that cover physiotherapy, being both accident and injury prone.

What I would give for a comprehensive health insurance comparison site! Maybe this is an instance where an adviser would actually be worth it.

But I suspect this is something I’m going to put aside yet again. Maybe when kids come into the picture (my two bosses who have kids reckon they’ve got their money’s worth and more from health insurance).

When did you last reconsider your insurance coverage?

What to do if you have champagne taste on a beer budget

What to do if you have champagne taste on a beer budget

No judgement if your tastes skew a little more extravagant than your budget indicates. I think most of us know what it’s like to not have everything we want.

It’s an eternal struggle. Our money is limited but the list of things we can potentially do with it is not.

Spend less

The quickest win is to cut expenses where possible. A dollar saved is a dollar earned (and won’t be taxed!). Trimming the budget = instant savings.

For most of us the three biggest expenses are housing, food, and transport. If you can cut down on any (or all!) of these big ticket costs you’ll be saving money every week/fortnight/month on these regular expenses.

While renting I always endeavoured to keep rent as low as possible, but now that I own I’m making extra principal payments with the aim of eliminating the mortgage outright earlier than scheduled. We’re a one-car household, which saves an untold amount of money, and while we could easily spend much more on groceries and eating out (and would love to) we keep it in check as much as possible.

Other recurring categories to look at are all your utilities and subscriptions – internet, phone, power, water, TV, gym, etc. I have a fear of commitment when it comes to these things and have no contracts for any utilities. That said, I do have a Spotify subscription, mainly for music on my commute!

Earn more

Sometimes there’s no way around it – you just need to bring in more money.

The most basic existence in today’s world costs money, and the kind of life you want almost certainly costs more than that.

If you can’t achieve what you want on your income, or at least make progress towards it – even after cutting back and ruthlessly prioritising – you may need to grow your income.

Whether that’s by diversifying your income and making money on the side, learning to negotiate or change jobs to make more, or even retrain and upskill in order to increase your earning potential, there are options.

In my experience this has made the biggest difference. Even when I was first starting out I was constantly side hustling to earn more money to squirrel away for my goals.

Making more has seriously supercharged my ability to get ahead. With that extra money I’ve been able to save and invest, buy a house, stop buying clunker cars. Quite simply, I could not have gotten this while making $40k, because there’s only so far you can trim expenses. I increased my income $15k overnight, and almost $30k in under 2 years – no amount of frugality could have achieved that same impact.

If you want to get right back to basics, the key thing is to spend less than you earn. And thus there are only two ways to improve your financial standing are: spend less and/or earn more.




Disease Called Debt